The United States Supreme Court has unanimously ruled that freight brokers can be subject to negligent hiring lawsuits under state law, thereby excluding them from protection under federal legislation—specifically, the Federal Aviation Administration Authorization Act (FAAAA) of 1994. This landmark decision in Montgomery v. Caribe Transport II has significant ramifications for freight brokers, shippers, and motor carriers alike.
The judgment arose from an accident involving Shawn Montgomery, who sustained severe injuries after his vehicle was hit by a truck associated with Caribe Transport II, an interstate motor carrier. The broker, C.H. Robinson Worldwide, Inc., arranged the shipment through Caribe II. Montgomery alleged that C.H. Robinson’s selection of the carrier was negligent as federal regulators had given Caribe II a “conditional” safety rating at the time of its hiring. You can view the court documents associated with this case here.
C.H. Robinson contended that the FAAAA preempted Montgomery’s lawsuit, arguing that state-imposed liabilities over hiring decisions related to the service of brokers are covered by federal law. However, writing for the court, Justice Amy Coney Barrett clarified that the FAAAA includes a safety exception clause under Section 14501(c)(2)(A). This clause maintains that state laws pertaining to safety regulatory authority involving motor vehicles are not preempted by the FAAAA. Therefore, negligent hiring claims related to safety remain actionable at the state level.
Justice Barrett addressed and dismissed several counterarguments from both C.H. Robinson and the federal government aimed at safeguarding the broker’s stance. Furthermore, Justice Brett Kavanaugh, joined by Justice Samuel Alito, issued a concurring opinion cautioning that while the decision was clear, the case was closer than it may appear. Kavanaugh underscored that brokers should still be able to defend against such lawsuits if they act diligently in selecting credible carriers.
The ruling essentially compels brokers to enhance their scrutiny of motor carriers they engage as it allows injured parties to pursue negligent hiring claims at the state level. For more on this decision, see Nora Collins’ article on SCOTUSblog here.